Case 11: the Launch of the Playstation 31

Japan is the home to of the top companies in the world. One of the companies, which has helped Japan’s economy to be one of the top, is Sony. Modern day Sony is a high profit high output company, which is manly due to its marketing strategies and decision to its customers.

I decided to do my research on Sony due to the advancement in technology and the competition between companies such as Microsoft, Apple, and Sony. I have been around long enough to know about Sony’s products but the real reason that attracted me to them for this essay is because I actually believe that they are having a negative trend. I am starting to see less Sony items in stores and I haven’t really heard much about them. Whereas companies such as Apple are constantly being talked about and you often see people walking around with some type of apple product in their hands. Today we are going to research Sony through a horizontal analysis and through different ratio analyses. Let’s see what we find!

To regain some of its market share in its “growth driven” and “stable profit generators” sectors, Sony can reposition its competition in the minds of consumers. For instance, Sony can use comparative advertising to demonstrate that its brands are superior to its competitors. In this situation, Sony can attempt to alter the portrayed image of its competitor, Nintendo, and position its PlayStation game console as the better-quality product (Positioning(marketing), n.d).

With all these elements concerning the gaming industry. PlayStation 4 continue to outsell its competition. Which is the Xbox One as well is the Xbox 360 and the Nintendo. In turn makes it the number one gaming console worldwide. Sony has committed to cultivating it's gaming system for the next generation to enjoy the product. Sony PlayStation 4 has no pressure with it status in the gaming industry with it significant prices, and design. With gives reasoning to buy the console.

The substitute products, that may take a portion of the market share away from the consumer electronics retail industry, do not create a huge or direct hazard. Today’s society and culture place a big emphasis on technology and it is highly reliant on electronics. The bargaining power of buyers for electronic products is extremely low because the buyers primarily consist of a weak and divided group of individuals, and technology has became a vital need for most people.

Overall, the market response to these three consoles has been surprising. Nintendo Wii, has outsold its rivals and more surprisingly, Sony’s PS2 has outsold PS3. This has let Microsoft and Sony with the enormous challenge of competing with a rival possessing two key advantages: a lower cost console and a product with a sound response in the market.

Sony has a broad offering in consumer electronics segment that it can leverage to provide a comprehensive

Nintendo appears to have implemented a market-penetration pricing strategy. The Wii at a cost of $250 is 50% less than the 20-gigabyte PS3 (smaller hard drive machine). At this lower price, it is easier for the product to penetrate the market due to affordability in most segments. This aligns with the assumed company’s aim of maximising market share in the current and new segments. To achieve this, Nintendo ensured that the Wii was less costly to manufacture. Moreover, a higher sales volume may lead to lower unit costs and higher long run profits. Conversely, Sony is believed to have a market-skimming pricing strategy. The company invested $2 billion in technology, so this strategy aims at recovering the maximum amount of revenue to cover the high costs incurred in the early stages of the product life cycle. Additionally, Sony has a strong brand due to the success of their previous machines (PS2 and playstation) and the high price assists in communicating the image of a superior product with quality.

Sony’s innovative approach and successful brand name, being associated with numerous motion pictures, computer entertainment, music, television, and online businesses, makes Sony one of the most successful, extensive entertainment and technology companies in the world.

1. What, if anything, should Sony do to turn around the sales of the PS3?

iii. Threat of new entrants-There has been the same companies in the market for several years now. With electronics, people tend to stick with one brand if they have a good experience with it. This makes it hard for others to enter the market.

Due to the rise in competition, Sony has to keep on innovating in order to keep attracting

The video game console industry is a very competitive segment. This segment requires a keen eye on product development as well as strategic product marketing and a rather large logistics arm to ensure rapid distribution to targeted areas. Video game industry in the US, which is hugely driven by retail sales of software and hardware, registered revenues of USD ~ million in CY'2012. Even so with the advent of new video game players in the industry, the revenues decreased by 11.7% compared to

Sony Company is a Japanese multinational corporation. Masaru Ibuka and Akio Morita are the founders of the company, in late 1945. The corporation is headquartered in Tokyo, Japan. It is among the leading electronic products manufacturers for consumer products. The company manufactures varied consumer electronics, equipment for video communications, innovative cameras and information technology equipment. It is one of the leading digital entertainment brands globally. It offers customers a range of exciting multimedia content. In the next one and

Sony has a strong reputation on the domain of digital and audio technology. However, Sony was a marginal player in the handset industry with 2% of market share. Previous attempts to enter the US and European markets both failed due to poor knowledge on mobile technology. Sony was too slow to move away from its traditional businesses such as music stereos, televisions, VCR and DVD, hence a partner who could provide expertise knowledge was needed.